Fertilizer units may stand on their legs

Monday, August 20, 2012 - THE government has taken a far-reaching decision of allowing fertilizer plants in SNGPL franchise areas to buy gas directly from wellhead to make things easy both for the fertilizer industry as well as the utility. The decision has been welcomed by the Fertilizer Manufacturers Advisory Council saying it would ensure dedicated gas supply for fertilizer plants on SNGPL network.

Fertilizer sector was facing complete closure as out of first seven months of this year, the plants received gas for two months only. According to reports four fertilizer units went out of production creating shortage of the commodity, unemployment for the labour force as well as spending of foreign exchange on import of fertilizer. What was worst was that the Engro Urea had a sovereign guarantee of the government of Pakistan for supply of gas, which was not being honoured. The decision that the fertilizer units can purchase gas directly will give a new lease of life and enable them to stand on their legs. According to experts there are several low BTU gas fields which are not in use and can be dedicated for the fertilizer plants which would not only reduce the burden from SNGPL network but would also save billions of rupees of subsidy government has to offer on imported urea. The decision reached to the satisfaction of the Fertilizer manufacturers is a proof that when there is a will there are ways to solve a crisis. We would urge the government to take similar steps to address the problems of other industrial units as that would be a win win situation for everyone.